Rogue Columnist

Greenscam

2009-11-12T15:27:37-08:00

The Phoenix Convention Center is the site of the Greenbuild International Conference and Expo, involving, the Info Center reports, "thousands of entrepreneurs, sales executives

and marketers in the fast-growing 'green' construction industry." I'm sure every attendee's welcome kit contained a laminated printout of the Rogue post, "Did you hear the one about sustainable Phoenix?" Or they should, as Phoenix is the capital of denial, pipe dreams of hydrogen cars and cooling sidewalks, and the green of sales, sales, sales. It is an international poster child of unsustainability. Put the conferees on buses, drive them around town, say "Don't do this!" and send them home.

In the same edition of the newspaper, oops, Information Center, was a story about shading the new Diamondbacks spring training structure out on the rez. I'm sure this can be spun as "green" construction, and this is one of the big problems with the entire green-built movement. A new stadium on what was rural land, surrounded by a giant heat-radiating parking lagoon and wholly dependent on long drives in automobiles is by its nature not green, not adding to sustainability. This is hardly a Phoenix problem. One sees all these new houses and buildings in new office "parks" trumpeting their LEED certification. Unless they are infill or rehabbing an existing (preferably historic) building, they are not really green. They are not green if they expand the urban footprint. Nor can they be divorced from their surroundings, such as walkable neighborhoods, transit, in-neighborhood shopping, etc. Otherwise, they are greenwash. Still, Phoenix takes the destructive absurdity to operatic levels. The idea that the already too-large Phoenix urban footprint can be enlarged by Superstition Vistas, and all those houses will be "green" (without a mandate, sure) is insanity.

The Info Center likely didn't have an article that came out of the European press, where whistleblowers claimed the International Energy Agency, under political pressure, has been inflating world petroleum reserves. It's a charge backed by academics and the reality of peaking production, the only reliable measure of oil. In other words, the world is running out of oil much faster than we're being told. The world is changing fast — don't forget climate change, too — and the biggest casualties will be cities such as Phoenix.

It would be interesting to see how much of the convention was based on reality rather than selling. Such would be a hard sell in reality challenged America.

While America had to put most of its stimulus into costly tax cuts and a federal rescue of states in fiscal crises because of tax cuts and tax limitations, our most formidable competitors are sprinting ahead. They're building high-speed rail and transit, and improving their regular rail systems. They're spending on real renewable energy and grabbing up oil supplies soon to be more scarce — these are strategic imperatives in China. And in the process, they are boosting their productive economies. America is in such an unbalanced trade position and public policy laff riot that its solar panel manufacturers are closing or moving jobs overseas. America is studying high-speed rail rather than building it, the sure way to create huge numbers of jobs that can't be offshored and rebuild a rail manufacturing capacity that went overseas.

Like Phoenix, America desperately wants to restart sprawl and all its low-wage service jobs, which by the mid-2000s had become our major economy aside from financial swindles (and the two were entangled, fatally). Please, God, give me one more real-estate boom... It's not going to happen, given the huge debt overhang, more Americans that want to live closer in and the increasing costs associated with the outer-ring suburbs. Indeed, a major new report discusses a tectonic shift in real estate away from the exurban building of the past two decades. If a new bubble does happen, it will lead to an even bigger crash very shortly.

As for all the stuff being sold, some is probably worthwhile, much greenwash. Solar panels are fine. Unless they are required for houses in Arizona, they won't have much effect, and we know the Kookocracy and the delusion that Phoenix is still the wide-open spaces of a few thousand rugged individualists will prevent any such thing. In any event, solar's promise risks being highly oversold. No one discusses the issue of water needed to cool most large solar arrays, for example. (Arizona already got snookered on such an issue with Palo Verde nuclear station). Or the efficacy of active solar to really generate the power cities would need. Arizona lost its game-changer, to be the world center of solar research and manufacturing, decades ago and shows no inclination to make the investment necessary to play that game. Just having a lot of sun doesn't give Arizona an advantage, despite all the hype and wishful thinking to the contrary. It's like the dream of electric cars — powered from which huge new coal or oil consuming power plants? Or oil shale — without asking the cost of refining this stuff into a gallon of gasoline if it can even be done. Or how much real crude will be required to make all of these "green" products.

Any delusion, however fanciful or failing the test of third-grade critical thinking, to stoke the notion that we can keep things going as they are.

The big discontinuities and crises that will disrupt our society are flowing slowly against our toes. In a few years or a couple of decades they will be floods. Right now we have a gift: the time to make a more orderly, less costly transition to a truly sustainable, properly scaled society. There would be plenty of profits from retrofitting suburbs for transit, walkability, car-sharing, etc. — plenty more from high-speed rail and rebuilding the regular passenger rail system that was once the world's finest. But it's different. It lacks the powerful lobby of the sprawl-builders ("we promise, this time we'll build green!" — as we wipe out more irreplaceable farmland, wetlands, wilderness and rural areas...). To many Americans, it's just too, well, French.

Apres sprawl le deluge.

Not like Ike

2009-11-09T15:07:31-08:00

The nut baggers are right. Socialism has come to America. It is here, now. The government owns the "commanding heights" of this economy, as is the case in classic socialist doctrine. Citizens of this American socialism get free medical care, housing, food, clothing, even travel. They have abundant educational opportunities, including college. It promises and actually delivers both diversity and social mobility. It also has elements of fascism, just as the nut baggers have warned in their rallies attended by hundreds: The socialism has a heavy corporate component, with giant companies moving in lockstep with the regime's demands yet also holding strong political sway within the regime. In exchange for its benefits, members of the society give up certain freedoms -- yet they keep joining enthusiastically.

I'm writing about the military, of course, and not just to show the absurdity of the nut baggers' claims. In a nation where six people are chasing every job, where college is increasingly out of reach, the only advanced nation in the world where people go without health insurance -- in today's America, the military is often the only option open. It made news last month when a man who couldn't get insurance joined the Army so his cancer-stricken wife could get help. (When I Googled "joined Army to get health care," the second and third hits out of 53 million were Army recruiting sites). Military recruiters have more than met their targets -- ones raised for the Army -- since the economic meltdown. Even with the danger of war, many Americans just don't see another way.

Elements of this have long happened. There's the classic case of the directionless kid from high school who joins the military -- sometimes under a parent or even judge's threat -- and becomes an adult. I went to high school with young men who joined up, served honorably and succeeded as civilians -- I doubt most of them ever would have chosen the military as a first option. And we honor their service. But the Great Disruption's first act -- the crash and its resulting unemployment, combined with two wars seemingly without end -- is creating something new. New and unsettling.

Twenty years ago the Berlin Wall came down. I'm convinced it ultimately happened because our free society showed its advantages over, and outlasted, the totalitarian regimes of Moscow and its satellites. But all this was backed by unprecedented-in-peacetime American military power, including nuclear weapons (Neil Sheehan's A Fiery Peace in a Cold War, about the general who led the development of the peace-keeping intercontinental ballistic missile is a fine read). Yet, combined with America's emergence with an internationalist commitment after World War II and Britain's retreat, a price was paid. It was the emergence of the national security state, elevated to extreme levels under George W. Bush but begun under Harry Truman. And it created the Military Industrial Complex, which Dwight Eisenhower, the liberator of Europe and no peacenik, considered dangerous. The founding fathers would be aghast.

The U.S. allocates around $660 billion a year for defense, 43 percent of the world's total defense spending in 2007. We pay out 4.6 times more than China, the world's second biggest spender. Ryan Avent imagines what just one year of this money would do if it were spent for 21st century infrastructure here at home:

With that kind of money you could entirely build out a national network of true high-speed rail. One year’s worth of defense spending gets you that. Which makes one wonder: where are all the economists, wringing their hands over cost-benefit analyses of these defense expenditures? Does anyone doubt that the net benefit of $100 billion spent on high-speed rail is easily higher than that for the last $100 billion spent on defense?

Alas, there's little lobbying money available to advocates of high-speed rail or transit, while the representatives of Boeing, Northrop Grumman, Lockheed Martin, General Dynamics et al have a powerful hold on Capitol Hill. And the status quo appears safer than any leaps into what appears to parochial Americans as the unknown. Military hardware, wanted or not by the Pentagon, makes up an increasing part of a deindustrialized nation's productive base and exports. It means jobs in congressional districts. Ironically, the district in upstate New York where the Conservative candidate drove out the moderate Republican (and losing) is most dependent on federal dollars to Fort Drum, whatever the sudden right-wing fear of the deficit. Indeed, conservatives never worried about the red ink when it was going to defense spending. It's only when health care comes up that the "scoring" by the Congressional Budget Office and "paying for itself" becomes paramount.

What can't be asked without having one's patriotism impugned is how long we can sustain this costly and highly distorting commitment? Eisenhower feared the Military Industrial Complex would lead to entanglements such as Vietnam, and now Iraq and Afghanistan. The former five-star general fought the Cold War on the cheap. He knew the way endless war could sap and coarsen a society, how it could undermine a democracy. What would he think now about the strained-to-the-breaking point situation of his beloved Army, much less that it is the only economic ladder up for a growing portion of the population?

China is spending where it will really hurt us: building universities, advanced infrastructure — including high-speed rail — and on research. Its playing currency and protectionist games to build and maintain its productive economy, including striving to become the world leader in energy sustainability. China has its own problems, too, such as a huge poor cohort and a pile of American IOUs. But it seems more focused on a future of competition for economic and educational supremacy, as well as scarce resources, especially energy. China is happy to see America bleed itself weak with foreign military entanglements, while Beijing extends a friendly trading hand around the globe — gaining access to oil and raw materials in the process. We act like the French general staff of old, always preparing for the last war.

Britain suddenly collapsed in the late 1940s, after fighting two world wars, carrying the always-losing cost of empire and seeing the rise of economic competitors that exploited London's advocacy of free trade. The British people, having given so much (nearly 900,000 killed in World War I alone, out of a population of 45 million), demanded such things at home such as national health care. Britain's retreat was sudden and earth changing. Fortunately, America was willing and able to fill the void. Yet Pax Americana was not just made possible by military power, but also by economic dominance in every industry, a strong and secure middle class, a sense of community unbroken by sprawl, a robust government and unions countering the power of the moneyed elites, and great public education. (One especially bittersweet part of the Sheehan book is to read about the scientists who trained at superb free universities in California and New York). America was also an oil power, something not to be underestimated. Now all these advantages have slipped away.

When we have exhausted ourselves from misadventures, bad choices and delusions, no benign ally will step up. The aftermath will be messy, not the least at home.

Phoenix 101: Minorities

2009-11-05T12:04:37-08:00

Thanks to Joe Arpaio and the Legislature of Russell Pearce, Phoenix has gained a global reputation as the Birmingham, Alabama, of the new century. I wish I could tell you that things were better in the past, but alas the racist and exclusionary roots of my hometown are deep. Far from being seen as a leap forward, the appointment of David Cavazos as Phoenix's first Latino city manager will be confirmation in the eyes of the elites that, as one smugly told me, "Phoenix is the Hispanic Detroit."

Phoenix was settled largely by Southerners and ex-Confederates, and it kept that Southern sensibility well into the 1960s. The Chicagoans who started coming in the 1930s brought their own prejudices that for decades tore that city apart. Phoenix was heavily segregated, including in the schools. To be fair, it didn't usually extend to such apartheid as a "colored waiting room" at Union Station. But the race and class lines were drawn hard. Phoenix saw itself as an Anglo city, unlike old Tucson, with its proud Spanish and Mexican traditions.

The Salt River Valley, of course, had once been part of Mexico. Before Columbus, it was the site of the most advanced irrigation-based civilization north of Mesoamerica before being abandoned by the Hohokam. By the time white families such as mine began arriving in the 1890s, Hispanics and Pimas were living there, too. With large-scale cotton farming, African-Americans also migrated to Phoenix creating what became a relatively large black community. Many were recruited by the farm interests seeking cheap labor and promising a better place than the racist South. Chinese immigrants came from California. Phoenix was never Des Moines on the Salt River. By the turn of the 20th century, Phoenix was a multi-racial society.

It was also a highly exclusionary one. "Mexicans," whether immigrants across the border or multi-generational Mexican-American families, lived in segregated barrios. The major black section of the city was south of the Southern Pacific tracks. Well into the 1970s, it was referred to by two words: the first is a slur, the second "town." Schools were segregated, with minorities kept in the worst-funded ones. Employment was circumscribed — the minorities worked in the produce sheds, the fields and groves; the black elite might have been Pullman porters on the trains. Phoenix at one time even had a Chinatown, around where the baseball stadium now stands.

A survey during the Depression found the slum around 7th Avenue and Buckeye to be one of the worst in the nation — this in a city of only 65,000. Plumbing and paved streets were virtually nonexistent. Here was where the Roman Catholic priest Father Emmett McLoughlin became a legendary advocate for the poor. He was instrumental in getting the Henson Homes project, which for decades was safe and attractive, before the crime and social breakdown of the 1970s took hold.

But it's important to see these citizens as more than exploited victims. Many owned property, built businesses and created proud and thriving neighborhoods. Also, the West was marginally better. I'm not aware of any lynchings in Phoenix, much less on a large scale.

As the city grew in World War II and saw an influx of soldiers, there's at least one instance of a riot involving black and white soldiers in 1942, which apparently included random shooting into black homes by the authorities. Phoenix could be a rich vein for the enterprising historian. Also, some Japanese were removed in the shameful internment — I was always told U.S. 60 marked the line between those sent to concentration camps, and those allowed to stay.

The modern Phoenix that grew into a populous city by the 1960s wanted nothing to do with these memories. De jure school desegregation ended. The old Chinatown disappeared as Chinese citizens were free to move anywhere, and followed the Anglos out to the new subdivisions and into the mainstream. (No richly historic and thriving Chinatown ever took root, as in other big cities). Lincoln Ragsdale, former Tuskegee airman and funeral director, reputedly the richest African American in the city, moved to Scottsdale. Valdemar Cordova was elected to city council in the 1950s, followed by Calvin Goode. I had black and Mexican-American classmates at Kenilworth, and when our Scout troop would meet at the Luke-Greenway American Legion Post, it wasn't unusual to see a Mexican-American vet along with the Anglos at the bar.

But beneath these successes, de-facto segregation continued. Minorities continued to be stuck in the worst schools, poor health care, neglected neighborhoods and lack of opportunity. Immigrant farmworkers were treated horribly; Cesar Chavez was seen by the Anglos as little more than a communist. And Phoenix's old Southern sensibility was morphing into the John Birch Society mentality that created today's Kookocracy. When our senior minister at Central United Methodist Church, the late Kermit Long, marched with Martin Luther King Jr. in south Phoenix, this bastion of establishment churches was the target of white protesters. When King was assassinated, Phoenix suffered a small-scale riot, covered up by the Republic and local bigs.

Not much had changed when I worked as an ambulance medic in the mid-and-late 1970s, much of the time in what Anglos considered the "bad part of town." White flight was well under way, moving north of McDowell, then Thomas. We and the fire department were the primary care givers to a population lacking health insurance or even Medicaid (although the County Hospital did serve the poor). Crime and lack of investment were really showing in these neighborhoods. For most of the barrios time was short. Some of the most historic and cohesive were wiped away to make room for Sky Harbor expansion.

Much more was to change, especially from the huge waves of Mexican and other Hispanic immigrants that began in the 1980s. Phoenix was never a dynamic place such as New York with institutions and an economy that allowed for more immigrant economic mobility. Instead, combined with the Sky Harbor land grab, these hundreds of thousands of new migrants were highly destabilizing to the historic Mexican-American community. The historic black community dwindled. White flight, and class flight, accelerated with the vast new sprawl oases that opened up with the freeway system. Maryvale became "Scaryvale." A city that only yesterday seemed so new, and touted its "classless" Western society, was filled with a poor underclass stuck in linear slums. By the 2000s, Phoenix also had the nation's largest population of urban American Indians, most living on the margins. But the reservations bordering the city became potent with gambling revenue and water rights.

Unlike Los Angeles, Phoenix never developed real minority political power. Firebrand student activist Alfredo Gutierrez became part of the establishment. Latino organizations dependent on City Hall partnerships can't be adversaries of the Anglo power elite. The old black leadership died off. Amazingly, Phoenix went for years without a single Hispanic city councilman.

It will be interesting in the 2010 Census to see how close Phoenix is to being a minority/majority city — surrounded by mostly Anglo suburbs. But a real "Hispanic Detroit" won't help property values in north Scottsdale. With the persistent "sweeps" and anti-Hispanic rhetoric and laws, Arizona does itself no good. The talented "brown people" of the world, the ones with lots of income, will think twice before choosing to come there. Intolerance and political extremism are bad for business.

Meanwhile, the challenges for a city with a huge number of low-skilled, first generation immigrants are growing substantially in a deindustrialized America, much less one in a state with abysmal public schools, especially for poor minorities. But Phoenix can't even think of how to leverage this human capital into the advanced economy, to everybody's advantage. There's too much screaming going on. "What part of illegal don't you understand!" This from Anglos who have profited from a cheap and frightened workforce to build this valley of crapola. What part of global competitiveness, much less the Golden Rule, don't these haters understand?

Think Phoenix has no history? Read the entire Phoenix 101 series here.

The vision thing

2009-11-02T12:23:41-08:00

It's good to know that one sector in Phoenix has escaped the recession: the "visioning" industry. Meetings led by consultants and officials can still be held to get "public input" that will lead to...nothing. I remember such a farce that the "city" of Buckeye paid god-knows-how-much-for in the mid-2000s: Respondents most wanted commuter rail to Phoenix. Where are the trains?

The city of Phoenix's Planning Department has been going around to the assorted "urban villages" of this 500-square-mile collection of real-estate ventures asking citizens to "imagine Phoenix the best it can be in 2050." This is all part of updating the holy General Plan, which supposedly guides all development. As the city presentation puts it, "a General Plan is a comprehensive guide for all physical aspects of a city, but also addresses issues such as building neighborhoods and creating community." Like that General Plan of the 1970s that said Bell Road would absolutely, positively be the permanent northern boundary of Phoenix.

If I'm reading the information from the Downtown Voices Coalition correctly, the attendees at the central Phoenix meeting wanted higher density to support mixed use, downtown and transit. Alas, Ahwatukee's top vision for 2050 was "safety," although it wants light rail. The swells of Camelback East want something called "the village concept" (inbred people with pitchforks hiding a local monster?) -- no mention of a downtown at all, certainly not light rail (it might bring "those people"). Far-off Desert View wants most a "small town, large city" feel. Maryvale at least ranks downtown and "proper public transit."

So much for imagining a great city.

I wasn't there, of course -- although I've been to scores of such meetings. I don't mean to disparage the well-meaning attendees of these no-doubt tedious affairs, and I'm sure plenty of people also want great arts, culture, social mobility, etc. But few of them can make these things happen. City Hall can't do much, especially with its severe budget problems and growing infrastructure problems. How many libraries could be kept open if the General Plan concept was trashed in favor of results-oriented zoning, mixed-use rules, incentives for density, historic preservation, etc.? (Or just trashed -- are you telling me no-zoning Houston is a less attractive or vibrant city than Phoenix?) Some of the feedback I saw was touching in its sentiment ("citrus groves," "sunsets"). Much of it was very basic. Nothing visionary in this visioning. But most of it was naive or off-point.

Will Phoenix even be around in 2050?

It's not an idle or alarmist question. Is the "hair on fire" issue that should be animating all public policy right now. Instead...chirp, chirp...silence. Please, God, give me one more real-estate boom... It doesn't require a sixth sense to know that a vision based on denial and commitment to an unsustainable status quo means one thing: "I see...dead city."

None of the serious science about climate change offers comfort to the American Southwest, particularly to its largest city. Temperatures will soar and stay that way for even longer periods. Weather patterns will shift unexpectedly (e.g., last year's violent, unprecedented in Phoenix microburst storm). The snowpack -- the region's only truly reliable, renewable water supply, will shrink, affecting not only the over-subscribed Colorado but the Salt and Verde rivers. Dangerous social instability and diseases could be on the way from even-worse affected areas south of the border. There simply won't be enough electrical capacity, or the ability to pay for it, to air condition a city of 4 millions (or even much less).

This is especially true in the second big enchilada of the Great Disruption: a higher-energy cost future. Oil will be harder to find, more difficult to refine and the subject of intense competition by all nations (it already is happening). No magic hydro car solution is going to be delivered by space aliens. As James Howard Kunstler keeps saying, we're going to have to make other living arrangements. But if Phoenix continues on its present course, those may merely be a long migration to other places (Washington state is already studying the consequences of "climate refugees" from places like Phoenix, as warming continues). True, Baghdad has 5 million residents. But Phoenicians can't handle that "lifestyle."

That the city would even conduct a "visioning" without an honest, clear-eyed view of future challenges borders on the criminal.

Beyond these two huge challenges, of course, many others are already in play. How can Phoenix create a diverse economy and compete against metros of its size? How can it extract itself from the fiscal meltdown brought on by decades of inadequate revenues and a hostile Legislature? How can it hope to provide quality infrastructure for 500 miles of "city" that is almost completely dependent on lots of driving? How can it attract private investment for more than sprawl, much less talent, in a world where the competitive stakes keep rising? And this is all now, not 2050.

My vision of Phoenix in 2050 would be a much more compact city, with perhaps 1 million people living within the footprint of the Salt River Project in high-quality density. They would be served by all sorts of transit and high-speed rail to other cities. They would enjoy shade everywhere, including in selected natural oases of trees and grass such as the historic districts. The city would have a highly educated workforce -- natural for a university center -- involved in diverse, cutting-edge industries. The high income gap and huge underclass of today would be a bad memory. Phoenix would be a major arts center and a tolerant, gentle place. All this would be supported by many engaged local stewards, leaders and companies with the money to make things happen. Phoenix would again be surrounded again by citrus groves and farmland, partly for the cooling, partly because of the need for a nearby food source. Miles of old suburbia would have been eliminated to create this green cordon around the city. Phoenix would not only be a survivor, but a net winner, having risen from the ashes of its old Ponzi-scheme self.

Tell me that can happen. Tell me another one.

Dogfight over Luke

2009-10-30T00:00:00-07:00

We may know as early as today if Luke Air Force Base will be chosen as a training base for the F-35 Joint Strike Fighter. The decision would give Luke further life once its primary tenant, the F-16 fighters, are phased out. Not surprisingly, the western suburbs of Phoenix are ambivalent, even if many support Luke publicly. Built up long after the base had been in operations, its residents are outraged at the jet noise. (Shoulda checked that out before you thought you were getting so much house for the money in that crapola lookalike subdivision). Encroaching sprawl, meanwhile, has had the base on a razor's edge of closing for years.

The group Luke Forward supports the base's continued existence. But Luke faces the mos powerful enemy: the Real Estate Industrial Complex. In other words, these economic elites — including, according to some sources, the Mormon Church, which owns land nearby — want the base to go away so they can continue building on the same sprawl model as the past 50 years. It's a big leap of faith: the old Growth Machine may not regain its health for years, if ever. But the Real Estate Industrial Complex is a simple-minded dinosaur. It feeds (builds tract houses, pockets quick profits). Its brain doesn't even realize its tail is on fire from economic, environmental and social tectonic shifts.

If Luke closes, to be replaced by more subdivisions and shopping strips, it will once again represent the colossal lack of imagination that keeps the Arizona economy backward (but highly profitable for the status quo).

Arizona has always been deeply dependent on federal spending, whatever its libertarian pretensions. It's a net "taker" state of tax dollars. One big part is the military, which not only pacified the state for settlement by the whites but then built numerous training bases there during World War II. Luke and Williams Air Force Base survived and continued their training missions, adding to a relatively diverse economy from the 1950s through the 1970s. Back then, Phoenix leaders had recruited some high-profile employers in aerospace and technology; it still had headquarters companies and was a major national agricultural exporter. Williams closed in 1993, and by that time the economy was on its way to its current extremely narrow form.

Unfortunately, the Phoenix of the 1950s and 1960s never saw the next leap possible with these military installations: the brainpower. For example, the Air Force's major technology and R&D bases went elsewhere, especially at Wright-Patterson Air Force Base in Dayton. Imagine if Phoenix, aided by Air Force Reserve Maj. Gen. Barry Goldwater, could have gotten some of that action? It might have created the kind of talent magnet seen in Albuquerque, with Kirtland AFB and the Sandia National Laboratories. That opportunity was never seized, even after Williams was closed and Luke's future seemed endangered.

By the 1990s, the "conservative" congressional delegation wasn't going to help Arizona get federal installations, much less high-tech, braino ones. This goes along with the missed opportunity to steal federal offices and jobs from the huge concentrations in Denver and LA. Meanwhile, most of the legacy tech and aerospace companies went away and more weren't successfully seeded; the old McDonnell Douglas helicopter unit holds on at the edge of Mesa, now under Boeing ownership. Luke hung in there, doing a job suited to a base surrounded by cotton fields and desert, but still providing thousands of jobs and a touch of diversity to the economy. Yet the shadow government of the state lusts for the day when Luke closes. It can build more houses! Who cares if most of the jobs pay wages far below those in similar metros?

The amazing thing is the "stuckness" of Arizona. Look at South Carolina, a state even more intolerant, reactionary and regressive than Arizona — indeed, in many ways, it never rejoined the Union. Yet it just pulled off an economic-development coup by landing the second assembly line of the Boeing 787 Dreamliner. It did so with lavish economic incentives, including $170 million for infrastructure. State leaders, including the disgraced Gov. Mark Sanford, aggressively courted Boeing and leveraged its dissatisfaction with the Seattle area. (Has Jan Brewer ever made a call to a major business lead?) It's the classic Southern strategy of going after big projects -- and North Carolina, Georgia and Alabama have been much more effective than South Carolina. And it couldn't have happened soon enough. With its old sectors of textiles and apparel decimated by China, South Carolina has the fifth highest unemployment in the nation.

Combined with other government policies, the strategy still leaves most residents of the state behind the national average in most measures of social and economic well-being. But thousands do benefit from these better-paying jobs. These states, unlike Arizona with the massive target of California next door, have capitalized on a corporate desire for cheaper land and wages. But their toolbox for economic development contains more than sunshine and golf. There has not been a long vendetta waged against their state commerce departments.

Arizona could do so much better. Arizona could be a world-beater. The lost opportunity with the meds-and-eds strategy is tragic. Phoenix, which already has more land than brains, could focus its development brains on quality infill for new generations that don't want to live miles from everything and be car-dependent — and start to protect itself against the consequences of climate change. But if they refuse to play in the real game, of populous metros building talent and competing worldwide, Arizona and Phoenix could at least do as well as South Carolina and Alabama.

But, no. Please, God, give me one more boom...

Hard landing

2009-10-28T00:00:00-07:00

When you think about the prison-like atmosphere in which we're forced to travel -- lacking the high-speed rail transforming the advanced nations of the world -- and the five-mile-high coffins in which we're locked for a cramped, nasty trip, who can argue with the punishments already meted out and yet to come for two Northwest Airlines pilots? They flew 150 miles past Minneapolis while distracted by their laptop computers. On second and third glance, they represent much more than two jokers in the cockpit.

Am I the only one who thinks America is much like these pilots? Off-course, befuddled by the latest merger and its consequences, living in a world where your pay has been cut in half already, enchanted by technology and believing it can save you (those laptops -- or the electric car), while the airship cruises along, on autopilot, past its destination. The difference is that America is not going to get a call from the flight attendant asking "what the hell is happening?" We're so adept at ignoring such questions even if they were to arise.

Delta and Northwest is a merger that never should have happened. It hasn't lessened the airlines' financial troubles -- for no transportation system really "pays for itself" (so why the hell do we expect that from Amtrak?). It has taken away one more competitor, consolidated an industry even further -- which means not only fewer choices and jobs, but fewer competitive ideas. Consider, for example that we are some 40 years into the era of widespread use of "jetways" to board aircraft -- and yet there's still only one way on or off, adding much time to boarding. That's what happens with groupthink. These cartelized airlines send much of the maintenance work to Third World countries, where managers order the cheapest fixes to airplanes, whether they are safe or not. Hundreds of thousands of jobs have been eliminated. All to appease the free-market gods. And the wayward pilots will be appropriately punished, banged down so hard they will have a hard time getting a minimum-wage job at the local Lowe's. And its two more jobs that Delta can check off its list, throwing the two into the worst labor market since the Great Depression. Christian America loves Old Testament retribution.

Meanwhile, Hank Greenberg, who presided over AIG's transformation from an insurance company to a massive weapon of financial mass destruction, is back at work: Creating a new company and siphoning off the talented swindlers and fraudsters from AIG. Like virtually all of the creators of the bubble economy that has nearly wrecked our future, Greenberg is not only free but back to business as usual. No major prosecutions have come from the worst financial panic since the Depression, even though it's been repeatedly documented that the crash was caused by bad public policy influenced by moneyed interests (deregulation, Phil Gramm), ideology spawned by moneyed interests for their own profit and administered as outright rackets. Yet none of the princes of Wall Street has gone to jail. None of the regulators or Alan Greenspan has been called to account. No Pecora Commission, which in the Depression brought out the dirty deeds of the banksters and led to Glass-Steagall and other protections, has been convened. Poor Bernie Madoff with Soap on a Rope is chump change. The real criminals are back at work.

America has been pushed to its fiscal limits to bail out the swindlers -- and they are using part of the "rescue" money to lobby against financial reform. Their cousins in the insurance and other for-profit health industries continue to block any reform that would get in the way of their rising profit margins that come from denying care and letting the uninsured die. The advanced and advancing nations of the world are preparing for a high-cost energy future by building high-speed rail. We're not even funding Amtrak as was agreed to last year. Our states amount to 50 fiscal disasters, created by the religion of tax cuts. We are completely unprepared for the discontinuity that is the future.

From their Park Avenue aeries or Greenwich mansions, these masters of the universe are as clueless as the distracted pilots as to our bearings. Similarly blissfully distracted is President Obama, the cowardly Democrats, and of course the Republicans, the Party that Wrecked America. From their lavish cockpits, run by the autopilot of special interests, a bought-off, sold-out corporate media and the cushion of money and the promise of more, more, more -- it's like sailing through a night sky with only white noise in the background. Our destination includes military commitments that are unsustainable, a future of huge economic costs and geopolitical disruptions from climate change and higher energy prices, the futility of trying to restart the sprawl, credit, "consumer" society, and the collapse of the middle class. Nobody in power wants to talk about it. Back here in coach, one senses nervousness among the few who wonder why we're not landing, not taking action, because this flight from reality has gone on so long already.

But in this case there will be no wake-up call to the pilots. And most of the passengers will be content with their electronic playthings and fantasies of McMansions until...

Citizens and 'shareholders'

2009-10-26T10:09:37-07:00

What does Goldman Sachs do, exactly? How does it make its money?

You can and should read Matt Taibbi's take on the investment bank, but let me simplify. These days, Goldman Sachs makes money by moving money from Spot A to Spot B to Spot C, all across the securities world, and at every point skimming something off the top. It creates and trades securities so complex that they are incomprehensible to the leading minds on Wall Street; these derivatives are ultimately worth no more than Confederate money and pose continuing systemic risk to the economy. But while the band plays on, Goldman makes its fees. With the general economy still deeply wounded, the firm made $12 billion in revenue in the most recent quarter for a profit of $3 billion. Goldman has so far set aside $16 billion -- that's with a B -- for executive bonuses. Of course all this has been made possible by the massive taxpayer rescue of a financial system whose collapse Goldman helped create, along with the Fed's zero interest rates and opaque lending "facilities" that have been a gift to Wall Street.

Something is so sick in America. The "healthy" sector of the economy makes nothing at all. Gone are the days when the capital markets were primarily concerned with marshaling capital to fund productive work. They now make money off of money in a colossal Ponzi scheme that cannot have a good ending. Take the case of Simmons Bedding, being forced into bankruptcy after being flipped seven times by private equity hucksters. Each deal was done with borrowed money. Each new owner would try to squeeze more out of the company. The long-term health of the company was sacrificed for short-term profits that went to a few. Top executives were lavishly compensated while average worker wages stagnated. Now a thousand Simmons workers and counting have lost their jobs. This has been happened at thousands of companies across the economy for years. And the cause was not merely private equity or neo-Michael Milkens -- it is the way the markets work now.

When the capital markets aren't making money from money -- lately your tax dollars and future living standards tied to national debt -- they make money by breaking things. This takes an ongoing toll on the American companies that actually still produce things. In other words, doing mergers that generate lots of fees to the bankers and lawyers, but inevitably result in the loss of huge numbers of jobs. How else can these deals pay for themselves and generate a quick return to the players? With Wall Street's unsustainable demands for ever higher profit margins, and an executive corps with no loyalty to any city or even nation, most every company is always on the block. Outrageous executive compensation, regardless of a company's performance or long-term health, adds to the pressure. Employees are expendable, and their wages have been stagnating for years even as their benefits are being taken at an ever quicker pace. But the ability for top bosses to loot the corporate treasury -- why that's the new American way.

It would be nice at this point to break away and discuss the good things that private equity does, the risk-spreading benefits that can come from custom derivatives, Wall Street's general commitment to prosperity on Main Street, how the heart of the banking sector remains in, well, banking. It would be reassuring to note that the shareholders who benefit from the sky-high profit demands of the capital markets are as likely to be average Americans as the super-rich. But those would be the comforting lies we tell children -- or an infantilized nation.

That doesn't stop the "conservative" meme that the "free market" owes nothing to society or to the nation -- only to its corporate shareholders. This originated with Milton Friedman, darling of "conservatives," who ironically made his name as a real economist dissecting the botched response to the 1929 crash, another speculative bubble gone mad, and who spent his career in an academia endowed precisely by corporations and business leaders who believed they had an obligation to more than the narrow and short-term appetite of shareholders.

And who are these shareholders? Data showing the worst income inequality since the eve of the Great Depression if not the Gilded Age indicate that the winners are the very rich, the "super high net income customers" sought by firms like Merrill Lynch -- which was once bullish on America -- and the capital markets players such as Goldman who profit from the sea of money loose in the world. Average folks consistently lose at the Wall Street casino -- something that has forced the largest pool of Americans over 65 to enter the job market since statistics have been kept. The promise of a Shareholder Nation, where average Americans would get the same chance to build wealth as the Rockefellers...the promise that helped encourage Americans to give up their unions, a government that would prevent industry consolidation and regulate economic predators...that promise has turned out to be a sham.

And so here we are. Goldman and its ilk are using your tax money to lobby against a return to sensible regulation of a financial system that can tank the economy and force repeated taxpayer bailouts. Their transnational corporate customers are in control in Washington, blocking and gaming everything from a real stimulus, to real health care reform, to meaningful action to stop the looming catastrophe of climate change. Unsustainably low tax rates protect the super-rich while schools languish and jobs are eliminated. The huge consolidated industries, with no loyalty or even common sense beyond next quarter, keep growing -- with the crumbs from Wal-Mart and the many electronic toys being tossed out to keep the proles in their mind fog.

There has always been greed and corruption in America. But never have the scales been so off-kilter. All must go to the great shareholder gods. A decent education for every American? A 21st century transportation system? Rebuilding a productive economy so we're not left like Britain after World War II? No. Nothing must interfere with the mysterious capital markets. None of these things that built America, that created the greatest middle class in the history of the world, "pay for themselves." So much better to make money from money -- at least for the winner elite. So much better for America to make its name with "financial engineering" while China does real engineering.

When does the time come to ask whether our present economic system is anti-American?

The men who would be Frank

2009-10-23T00:00:00-07:00

Four finalists have reportedly emerged to replace retiring Phoenix City Manager Frank Fairbanks. All are current City of Phoenix employees. They're good men, and David Krietor and Ed Zuercher especially hold promise. Still, the finalist lineup reinforces the sense of Phoenix's parochialism and inward-looking mindset. It's a problem that extends far beyond City Hall. But it's significant given government's huge footprint in a city with no major corporate headquarters, influential civic stewards or powerful business interests beyond building more sprawl (which apparently extends to self-dealing city council members). There is, simply, no other major American city as limited as Phoenix in its economy or centers of power -- or its lack of self-awareness. So something that elsewhere might seem routine, carries big weight and risk here.

This is also a portentous moment for a changing of the guard. When Fairbanks became city manager in 1990, Phoenix was in a nasty real-estate recession but otherwise still on a sunny trajectory it had enjoyed since the end of World War II. City Hall's reputation for clean government and efficiency earned it the Bertelsmann Prize as one of the two best-run cities in the world. In the early '90s, the city still had corporate leaders such as Dial and Valley National Bank. Chastened by the real-estate bust, leaders established the Greater Phoenix Economic Council and worked to diversify the economy. Phoenix was the uncontested regional leader; the suburbs were still relatively small. Its population was much more middle class.

Fairbanks' successor will inherit a far different city, and not merely one that has grown to 1.5 million from 983,000 in 1990.

Phoenix has slowly seen its economic and political influence eroded by the suburbs -- the nightmare that caused decades of City Councils to continue annexing until the city reached 517 square miles in size, to no avail. The region's limited technology sector is focused in Chandler. Similarly, Wells Fargo chose Chandler, rather than downtown Phoenix, for its thousands of back-office employees. What remains as Arizona's corporate and entrepreneurial center is at the Scottsdale Airport. Scores of office "parks" in surrounding suburbs have taken Phoenix jobs in the zero-sum game left when real economic development was tossed aside in favor of the growth machine. Phoenicians were suckered into paying for the freeways that sucked away their city's jobs and much of its middle class.

Ominously, Phoenix has aged into a Sun Belt version of the older eastern cities it sought to avoid emulating. It has a huge underclass in miles of linear slums (once the tract houses of the middle-class American dream). The suburbs ensure that the region's social problems are dumped on Phoenix. While the city has its own "suburbs," with little loyalty or sense of community with the central core, it can no longer win in the development-fee or sales-tax battles against the newer suburbs. Unfortunately, it has no real economic strategy to replace the old model. The effort to create a Texas Medical Center-style complex in downtown Phoenix has been badly bungled. A retro move to establish a "second downtown" on the edge of north Snottsdale has ended in the state Supreme Court, threatening all city economic efforts.

Meanwhile, the city has few friends and many determined enemies in the Legislature. This has made every major project a battle royal, for the Kookocracy is both uncomprehending of, and hostile to, the needs and issues facing cities. State shared revenue was already leaving Phoenix for the suburbs, even before the economic crash. The Legislature has been a key impediment to making speedy advances on the Phoenix Biomedical Campus or downtown ASU -- failures that have helped freeze the city in a poor position compared with its rivals nationally and internationally.

The convention center, ASU campus and light rail have all been successes. Unfortunately, they also showcase Phoenix's weaknesses, all being creatures of city funding rather than a robust private sector. The empire of Sky Harbor International Airport, once Krietor's domain, rolls along, although it seems to benefit the suburbs a tad more than the city. All the finalists for city manager have had a hand in the advances. One, Rick Naimark, gets demerits from me for turning the Henson Homes Hope VI project into an ugly suburban clone instead of an extension of the center city -- and turning old Henson's grass and trees into gravel (although that may have come from "Rock" Fairbanks). Indeed, the Hope VI came from the efforts of a neighborhood group; the city was disinterested and even hostile at first -- which tells you something about the insularity of City Hall.

In any event, Fairbanks successor will take over a very different Phoenix -- and these were the challenges that existed before the Great Recession cratered government spending, crashed the growth machine and permanently altered much of the economic landscape -- and all to Phoenix's disadvantage. The winner might find himself in the mindset of President Kennedy the day he was visited in the Oval Office by his likely 1964 opponent, Sen. Barry Goldwater. A weary Kennedy said: "So you want this fucking job?"

In Phoenix, it may well be a job that has outlived its usefulness. Phoenix is by far the largest city with a council-manager form of government. That worked fine in the moment of history that Phoenix arose, when the automobile and sprawl seemed like the bright future, and when it was a smaller place. Now it makes change difficult, particularly the radical measures needed to revive Phoenix. A strong mayor, combined with smaller council districts alongside a few at-large members may be the only thing that finally shakes up a city government that's still living in 1993. That's still living in Fairbanks' "move slowly across the water without making waves" mindset. Phoenix is in decline. City Hall, the town's last major headquarters, just doesn't realize it.